When the market has reason to go up, it goes up. Obvious and logical.
When the market has reason to go down, it goes down. Again, obvious and logical.
But when the market in bull phase remains range bound for an extended period of time and doesn't have reason to go down or up from there, it starts going down!
After a while, real reasons are discovered on the way!
This is what happened in mid Dec'09 and mid-Jan'10 with Nifty!
Similarly, when the market in bear phase remains range bound for an extended period of time and doesn't have reason to go up or down from there, it starts going up!
After a while, real reasons are discovered on the way!
This is what happened before the ultimate rise after March'09 and again this has happened after budget'2010.
The reasons are simple.
There is always restless money waiting to come in,
There is nervous money ready to move out!
and then, there are professionals itching to make money! And they know they can't make money if markets are not moving!!
If market is stuck in one direction, then it better move in other direction.
The deep pockets have the ability to trigger that opposite movement!
So, avoid being adamant
1) to stay short when markets aren't going down, and
2) to stay long when the markets aren't going up.
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